Razorpay receives $160 mn funding, valuation trebles in less than 6 months

• The startup has raised fresh funding of $160 million in a funding round led by Sequoia India and Singapore-based GIC.
• The startup won the unicorn startup after it raised $100 million in a round co-led by Singapore's sovereign wealth fund GIC and Sequoia Capital in last October.
• The fintech competes with BillDesk, CC Avenues, Paytm, and PayU, and in the neo-banking business, it competes with Jupiter, Niyo, and Open.

Razorpay announced that it has raised $160 million in a funding round led by Sequoia India and Singapore-based GIC, bringing its valuation to $3 billion in less than six months.

Existing investors Ribbit Capital and Matrix Partners have participated in the funding round, demonstrating risk investors' strong interest in India's fast-growing fintech and digital payments industries.

Last October, the Bengaluru-based company entered the unicorn group of startups with a valuation of over $1 billion, when it raised $100 million in a round co-led by Singapore's sovereign wealth fund GIC and Sequoia Capital at a valuation of just over $1 billion.

Razorpay is one of the most rapidly growing startups in terms of valuation. Other fintech firms, such as Cred, a credit card payments network, Pine Labs, a merchant payments solutions firm, and Groww, a stockbroking app, have seen rapid valuation increases.

The company, which provides merchants and businesses with payment, lending, and banking solutions, will use the new funds to grow in Southeast Asian markets such as Malaysia, Indonesia, and Singapore.

According to Mathur, the company is also in the process of acquiring an enterprise Software-as-a-Service (SaaS) firm for merchant management and plans to employ around 600 people in India and abroad to expand its neo-banking market, which has seen significant traction in recent months.

Razorpay is a payment processing provider that uses its gateway service to help companies simplify collections while also assisting small businesses with cash flow management. Food delivery sites Swiggy and Zomato, as well as Facebook, Cred, ICICI Prudential, and Ola, are among its clients.

Also, the company claims to serve over five million small businesses with payment solutions. Razorpay X, the company's neo-banking platform that helps merchants manage current accounts and obtain credit from partner banks, processes loans worth Rs 700-800 crore every month. Also, the organisation provides corporate credit cards to startups in need of working capital through partnerships with approved lenders.

In response to the increase in valuation, Mathur said that there is plenty of capital for fintech companies that manage their unit economics well, but that investors are avoiding early-stage startups with riskier business models.

Unlike peers Cred and Pine Labs, which both recently joined the unicorn group, Razorpay has no plans to apply for a lending licence, according to Mathur. He said, "We want to concentrate on our strengths, which is a tech and platform approach for companies trying to address their banking needs."

Also Read:Paytm Money opens new R&D center in Pune, To hire over 250 engineers

Since its inception in 2014, the company has raised $206.5 million in four funding rounds. Ribbit Capital and Tiger Global led a $75 million series C funding round in 2019.

In the payment gateway market, the fintech competes with BillDesk, CC Avenues, Paytm, and PayU, and in the neo-banking business, it competes with Jupiter, Niyo, and Open.

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